Ovum's view: 5G is here, but 4G technology will continue to play a long-term role

According to a new research report from Ovum, 4G mobile technology reshaped the telecommunications industry, but 5G is expected to reshape society as a whole. Ubiquitous 5G networks will support the digitization of all our industries and interactions, embedding digital computing and communications into our daily lives. Right now, all attention is on 5G. So, what does the future of 4G hold?

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It is not easy for mobile operators to build ubiquitous 5G networks. The wave of investment in 4G LTE has brought huge benefits to users, who get more data traffic for the same price as 3G services. On the other hand, mobile operators' revenue growth is slowing due to a sharp decline in voice revenue. Their profitability is no stronger than before, and in some cases, it has even declined.

The cost benefits of faster, more efficient mobile broadband justified broad and deep 4G investments. Broad and deep 5G investments will be more complex and will depend in part on new revenue streams. New data services such as fixed wireless access can help create new revenues, but new enterprise use cases enabled by 5G are not yet fully defined. This will limit the development of 5G business use cases in some regions for years to come.

David Kennedy, head of research for Asia Pacific at Ovum, said this has important consequences. 4G networks will be an important part of mobile operator strategy for many years to come. 5G deployment will be slower than 4G deployment, and there is a risk that there will continue to be performance differences between 4G and 5G coverage areas. The risk is that a new digital divide will emerge between 5G-haves (covered 5G services) and 5G-have-nots (not covered by 5G services).

To avoid this situation, operator networks need to evolve from the initial non-standalone mode (5G base stations based on 4G core network) to a balanced mix of 4G/5G base stations based on 5G core network, and the 5G core network will take advantage of the latest upgrades and improvements in the LTE standard.

While 3GPP Release 15 finalized the 5G technology standards, it also incorporated the latest improvements to 4G technology in the form of LTE Advanced (LTE-A) Pro. LTE-A Pro brings a new level of performance to 4G, approaching 5G performance in some cases, such as data rates exceeding 3Gbps (compared to 1Gbps for LTE-A) and latency as low as 2ms (10ms for LTE-A). This is very commendable performance. In low- and mid-band frequencies, 4G speed performance is comparable to 5G. 2ms latency is more than enough for all but the most demanding applications.

4G LTE-A Pro therefore offers a strong interim solution while 5G networks are being built and new use cases are being developed. As 4G technology continues to evolve and global IoT demand grows, for operators who wish to prevent the rise of a new digital divide, core networks and 4G base stations will require targeted long-term investments to improve capacity, speed and latency performance.